Published by ChinaMNC · Fengshan

China Signals Policy Direction on 'New Quality Productive Forces': What Foreign Founders Should Watch

A practical ChinaMNC summary of the Central Committee and State Council opinions on developing new quality productive forces, highlighting innovation, emerging industries, green transition and openness measures relevant to foreign founders setting up and operating companies in China.

Why This Policy Document Matters for Foreign Founders

The Central Committee of the Communist Party of China and the State Council have issued a set of opinions on developing "new quality productive forces" (新质生产力). For foreign founders building a presence in China, the document is less a single rule than a map of where policy attention, funding instruments and regulatory experimentation are heading over the coming years. It signals priorities in science and technology, industrial upgrading, digitalisation, green energy and openness — areas that directly touch company registration, sector choice, R&D planning and access to incentives.

Below is a founder-focused reading of the source, limited strictly to what the document states.

Guiding Logic: Innovation, Reform and Productivity

The opinions set out a framework guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the spirit of the 20th Party Congress and successive plenary sessions, and the new development philosophy. The stated principles include:

• Innovation leadership and reform as the key, with measures adapted to local conditions and sequencing that builds the new before discarding the old.
• High technology, high efficiency and high quality as the standard.
• Balancing government and market, quality and business form, reform and development, self-reliance and openness.
• Coordinating development and security.

The core marker is a substantial rise in total factor productivity, achieved through technological breakthroughs, new combinations of production factors, and deep industrial transformation and upgrading. The document calls for innovation across science and technology, industry, development models, institutions and talent mechanisms, and for production relations better suited to these new forces.

Science and Technology: Where Support Is Directed

Original and disruptive innovation

Major science and technology projects will be organised around strategic, landmark and leading products, aimed at the world's scientific frontier, the main economic battlefield, major national needs and public health. The document stresses both goal-oriented and free-exploration research, support for basic and applied basic research, coordinated construction of science platforms and major infrastructure with open sharing, and programmes for basic and interdisciplinary disciplines.

Critical and core technologies

China will use its new nationwide system to organise high-quality development actions for key manufacturing supply chains and industrial innovation projects, combining full-chain, full-factor and full-ecosystem support. Policies for first-of-their-kind equipment and first-batch applications are to be implemented to speed technology iteration.

Enterprises as the main innovation actors

Several measures are relevant to companies with R&D in China:

• A corporate R&D reserve fund system and broader inclusive incentives.
• An increased super-deduction ratio for enterprise R&D expenses, with encouragement for small and medium-sized technology firms to raise R&D spending.
• Eligible enterprise R&D projects may be elevated to national projects, and capable private enterprises are encouraged to lead major national technology missions.
• Support for specialised, refined, distinctive and innovative SMEs, and institutional arrangements for state-owned enterprises pursuing original innovation.

Commercialising results

The document promotes large-scale demonstration of new technologies, products and scenarios, and construction of proof-of-concept and pilot-testing platforms. It proposes evaluating science projects across their whole cycle, licensing university and institute results to smaller firms on a "use first, pay later" basis, and opening large companies' supply chains to SMEs. Artificial intelligence is to lead changes in research paradigms.

Industry Priorities: Upgrading, Emerging and Future Sectors

Traditional industries

National standards will guide upgrades, with support for enterprises adopting digital, intelligent and green technologies. The document lists mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding and construction as sectors whose global position is to be consolidated. It also cites industrial base rebuilding, major technical equipment, manufacturing transformation and large-scale equipment renewal programmes, plus tax and funding support for technological upgrading, and agricultural and service-sector initiatives.

Emerging industries

Strategic emerging clusters are to be built in next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment and aerospace, adapted to local conditions. The document calls for deeper specialisation, cross-regional coordination, avoidance of "involution-style" competition, and orderly development of the low-altitude economy and commercial space under safety conditions.

Future industries

Quantum technology, bio-manufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence and sixth-generation mobile communications are named. A funding growth and risk-sharing mechanism is to be established, with social capital encouraged.

Digital, AI and Green Transition

The document covers data property rights, trading, revenue distribution and protection, pilot programmes for data factors, national data infrastructure, "east data, west computing", the industrial internet and a national integrated computing network. A dedicated "AI+" initiative targets application in traditional industries, intelligent terminals, computing power, algorithms and data, alongside monitoring and risk-response systems for safe, reliable and controllable AI.

On green development, it calls for green manufacturing and services, zero-carbon factories and parks, circular waste systems, carbon footprint and labelling systems, an expanded national emissions trading market, a unified green certificate market, green finance products and government green procurement. An energy revolution section addresses high-share renewable power systems and international cooperation.

Institutions, Finance and Opening Up

Reforms include demand-oriented project selection, application-oriented evaluation, and pilot reforms on job-related science and technology results. Market supervision is to be improved with antimonopoly enforcement, AI and bio-sector governance, and data-based supervision. On finance, the document encourages angel, venture and private equity investment, government guidance funds, patient capital, bank lending suited to new productive forces, science and technology bonds, listings, insurance products and technology leasing.

Internationally, it promotes opening-up, free trade pilot zones gathering advanced production factors, joint science parks, Belt and Road joint laboratories, international big science programmes, and encourages foreign venture capital institutions and international standards organisations to operate in China. A cross-border data flow mechanism that is efficient, convenient and secure is to be established.

Talent and Practical Takeaways

The document links education, science and talent reform: expanding higher education, new research-oriented universities, modern vocational education, and customised training jointly run by enterprises and universities.

For foreign founders, the practical signals are clear: sector choice, R&D structure and data and green compliance will increasingly align with these priorities. Founders should map their activities against the listed industries and incentive channels before finalising their China entity.

Need help? Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.